What is the difference between Money Bill and Finance Bill?

Money bills and finance bills are essentially proposals which are brought before the parliament for discussion and thereafter to be passed as statutes. In our legislature for a bill to become an act, it is required to be passed by both houses of the parliament i.e., Lok Sabha and the Rajya Sabha. Once passed by both the houses, bills are then sent to the president for its assent. The bills which can be presented before the house are characterised on the basis of the matters covered by them into the following classes:

1. Ordinary bill

2. Money bill

3. Finance bill

4. Constitution amendment bill
    

What is a Money Bill?

Money Bills, unlike other forms of bills are characterised by the nature of the act is proposes. Money bills are thus essentially those which pertain to subject matters such as taxation, borrowing of money by the government and/or expenditure from or receipt to the consolidated fund, as enshrined in Article 110 of the Constitution of India. Thus, money bills are of a more specific nature and fall under this narrow ambit. Money bills can only be introduced in the lower house of the parliament i.e., the Lok Sabha by a minister only. Further, a money bill cannot be introduced before the Lok Sabha without the recommendation of the President. Therefore, once passed by the Lok Sabha by a simple majority of the members present and voting, it is naturally sent to the Rajya Sabha for its recommendations. Pertinently, while transferring a money bill to the Rajya Sabha, the speaker’s approval is mandatory. Once received, the Rajya Sabha cannot reject the money bill and simply has the right to provide recommendations. Conversely, the Lok Sabha is empowered to reject the recommendations of the Rajya Sabha and if no recommendations are given by the Rajya Sabha within a period of 14 days, such money bill is deemed to have been passed by both houses of the parliament. Further, once passed by the houses, the President may either accept or reject such money bill but cannot suggest recommendations of its own.
 

What is a Finance Bill?

A finance bill is a unique category that in essence relates to matters pertaining to revenue or expenditure. These include bills relating to the imposition of new taxes or amendment to the existing tax regime etc. A finance bill is a part of the union budget which specifies all changes required to amend the taxation regime by the finance minister. Finance bill is akin to an umbrella legislation which proposes composite changes to numerous laws which govern the tax regime, to achieve the proposals of the union budget. A finance bill is further classified into two classes on the basis of which house it can be introduced before. While category A can only be introduced before the Lok Sabha and covers matters under provision 110 (1) of the constitution, Category B can be introduced before either house of the parliament and relate to provisions regarding the consolidated fund of India.

Thus, as opposed to money bills, a finance bill can be introduced in both the Lok Sabha or the Rajya Sabha on the specific recommendation of the President.
 

Difference between an Ordinary Bill and a Money Bill

The following are the differences between money bills and finance bills:

1. A money bill is considered such only if it exclusively pertains to maters enlisted under Article 110 (1) of the constitution. On the other hand, a finance bill in general contains provisions pertaining to the revenue and expenses as proposed under the union budget.

2. A finance bill is categorised as being akin to a government bill. A finance bill on the other hand is essentially a form of an ordinary bill.

3. A money bill can only be introduced before the lower house of the parliament i.e., the Lok Sabha. However, a finance bill can be introduced before either of the two houses of the parliament depending upon whether it falls under category A or category B as detailed above.

4. A money bill, prior to its introduction before the Lok Sabha requires to be approved by either the central government or the President of the nation. A finance bill on the other hand can only be introduced on the recommendation of the President.

5. Not all finance bills can be termed as money bills, since money bills ae those which are specifically granted the certification of the speaker.

6. The powers granted to the Rajya Sabha are also distinct in the case of money bill as opposed to finance bill. The Rajya Sabha cannot reject a money bill and can only make recommendations which the Lok Sabha may reject. However, in case of a finance bill, the Rajya Sabha exercises the same powers as that of the Lok Sabha. Consequently, no joint sitting of the two houses is envisaged in case of a money bill since there is no possibility of a deadlock, however a joint sitting can happen in case of a finance bill.